Last week focused on the key to being ready for unseen issues that arise; that is preparation and organization of your financial paperwork. Today, I would like to like to address what to do with that financial information and why it is vitally important to keep it organized.
A financial program or app is a necessity.
Checking your bank balance online every day is not good enough. You need to have a financial program like QuickBooks. This allows you to organize your bills and see what is due and when. It also allows you to set up reminders that will prompt you to pay your vendors. You also can see who owes you money and how long they are taking to pay you. Finally, if you keep the program up to date, it will give you an accurate bank balance, taking into account checks that have not been cashed that could overdraw your account if you are not keeping track of which ones are still outstanding.
Financial statements and business planning are other benefits of having a financial program. I have always said you don’t know where you are going unless you know first where you are. By just looking at a bank balance, you have no idea what is on the horizon financially or what trends have happened in the past. Having an organized financial life will not only help ensure there is enough money in the bank to cover bills, but it will also be vital to growing your business.
In the current times we are in many small businesses that have received EIDL loans and grants. The SBA loan agreement specifically cites in “Books and Records” the “SBA may require: inspections and audits of any books, records and paper in the custody or control of Borrower or others relating to Borrower’s financial or business conditions, including the making of copies thereof and extracts therefrom”.
Are you prepared?
If you already have a financial program and system in place and keep it consistently updated, way to go! If you struggle in this area or would like to talk more about how to get set up with a program, reach out to someone at JB Financial Associates. We will help you implement a plan so you will always feel prepared.